The Lebanese state draft budget for 2019 will have a deficit below 9% of gross domestic product (GDP) and it may be less than 8.5% of GDP, Finance Minister Ali Hassan Khalil said on Saturday, according to broadcaster LBC.

Khalil made the comments in a discussion with reporters. The deficit was 11.2% of GDP in 2018.

Lebanon has one of the heaviest public debt burdens in the world at around 150% of GDP.

Khalil wrote on Twitter the draft budget includes a saving of around 1 trillion Lebanese pounds ($663 million) in debt servicing costs, without giving further details.

The government aims to reduce debt servicing costs through issuing treasury bonds at an interest rate of 1%, Khalil told Reuters.

“This matter will happen through coordination between the finance ministry, the central bank and the banks after the budget approval to issue treasury bonds in Lebanese currency in the range of 11,000 billion Lebanese pounds at an interest rate of 1 percent,” he said.

Khalil told Reuters in an April interview the draft budget projected a deficit below 9% but since then the coalition cabinet has been debating it.

“The debate on the budget must end tomorrow so that we end the atmosphere of anarchy and rumors,” he tweeted on Saturday, an apparent reference to conflicting statements and reports about proposed cuts in the budget that have fueled protests and strikes.

Prime Minister Saad al-Hariri said earlier this month that Lebanon was far from bankruptcy but failure to pass a “realistic” budget that brings down the deficit would be tantamount to a “suicide operation” against the economy.

Source: Reuters